Tom Wheeler’s Transatlantic Online Privacy Gaffe

The British poet John Donne wrote nearly four centuries ago that, “no man is an island, entire of itself.” This maxim has become equally true when it comes to technology regulation. In today’s closely intertwined global digital economy, regulatory edicts about the Internet made by one nation can and often do have far-reaching impacts and consequences on all nations.

Case in point: the recent concerns raised by European policymakers about the Federal Communications Commission’s decision to extend its growing and acquisitive regulatory tentacles in to one area of Internet policy that to date has been ably, coherently, and comprehensively managed by the Federal Trade Commission — broadband privacy.

Normally, one wouldn’t think that such an arcane jurisdictional issue between American regulators would raise many eyebrows across the Atlantic.

So it was sobering to read a recent piece by European Parliament member Amjad Bashir, who warned that the FCC’s recent “power grab” with regard to privacy policy – in which Chairman Tom Wheeler proposed splitting privacy oversight in two with the FCC overseeing ISPs and the FTC relegated to keeping tabs on over-the-top companies like the so-called “GAFA” (Google, Amazon, Facebook, Apple) – could seriously disrupt the fragile and still tentative progress European and American negotiators have been making to forge a new consensus regarding a Transatlantic “Privacy Shield” to enable transfers of digital data after the existing safe harbor framework was nullified by European courts last year.

To move forward, the European Court of Justice ruled that U.S. privacy rules must be “essentially equivalent” to those of the EU. U.S. negotiators argued that this equivalence indeed exists, applying the old framework employed by the FTC. But with Chairman Wheeler’s new privacy rulemaking, a “double standard” has now emerged, that may, according to Bashir, undermine confidence on the part of European regulators that such regulatory “equivalence” still exists. And this will seriously impede progress towards reaching a deal. As Bashir warns:

“…these developments could not come at a worse time in discussions with the European Union. With the talks on whether to accept the Privacy Shield finely poised, and data protection authorities, the parliament, and the commission all looking to weigh in, the EU does not need its negotiating partner suddenly changing its position. All this can and will inevitably lead to are endless talks, and worse still, further disputes.

What the EU needs from the US right now, on the other hand, is a negotiating partner that can be relied upon to stick to its position, both on home turf and abroad, and with which it can work efficiently to safely facilitate transfers of data, the lifeblood of the digital economy.”

Chairman Wheeler’s efforts to insert the FCC so clumsily into broadband privacy by creating a false, ill-considered, and illogical distinction between ISPs and the rest of the Internet ecosystem is bad policy and may well do more harm than good for consumers. There is no need to force an unseemly “jump-ball” between the FCC and the FTC, which has otherwise been an effective and vigilant steward and a tough enforcer of online privacy rules in the United States. American consumers and Internet innovators alike deserve a more coherent, streamlined and coordinated approach from our government when it comes to the massively important issue of our online privacy.

Mr. Bashir’s essay is an important reminder that no regulatory agency is an island — entire unto itself. The effort by the FCC to fundamentally upend what has been a tested and consequential approach led by the FTC to ensure and enforce online privacy is confusing and unnecessary.

Regulatory hubris can — and does — have much broader, global, and unfortunate — consequences. And our global Internet neighbors and their policymakers are watching with alarm.